Building the Best Private Capital Network: Insights from Jesse Witkowski on Raising Capital from Family Offices

In the competitive world of private capital, securing funding can be a daunting task for founders and entrepreneurs. However, Jesse Witkowski, a prominent figure in the private capital space, recently shared invaluable insights on LinkedIn about how to effectively raise capital from family offices. His post, titled "Building the Best Private Capital Network in the World, DFX," offers a strategic guide for founders looking to navigate this complex landscape. By focusing on relationship-building, understanding the unique nature of family offices, and adopting a long-term perspective, founders can unlock this significant source of capital.

Understanding the Diversity of Family Offices

One of the key takeaways from Witkowski's post is the importance of recognizing that family offices are not a monolithic group. "Every family office is unique (e.g., 5th-generation industrial wealth, crypto billionaires, oil, art, politics, private equity); treat them as individuals," he advises. This diversity means that founders must tailor their approach to each family office, taking into account their specific investment philosophies, risk tolerances, and interests. A one-size-fits-all strategy simply won’t work when dealing with such varied entities, which may range from traditional wealth to modern tech fortunes.

Building Relationships Before Pitching

A common pitfall for founders is pitching too early in the relationship. Witkowski emphasizes the need for patience and value creation: "Don’t pitch in first or second meetings; listen and add value (e.g., introduce someone, share insight)." Instead of focusing on selling your idea immediately, founders should prioritize understanding the family office’s needs and providing tangible value. This could mean introducing them to relevant contacts, sharing unique industry insights, or offering solutions to their specific challenges. Building trust and rapport is crucial before any formal pitch, setting the stage for a more receptive conversation later.

Learning from Family Offices

To establish a meaningful connection, founders must take the time to learn about the family office’s background and investment approach. Witkowski suggests asking open-ended questions like, “What led your family to start investing directly?” and “How has your approach evolved?” These questions not only demonstrate genuine interest but also help uncover areas of alignment, such as shared values around impact, legacy, or innovation. "Let them share their story... to find alignment (impact, legacy, innovation)," Witkowski notes. This mutual understanding can lay the foundation for a long-term partnership, as family offices often value relationships that resonate with their core principles.

Identifying Legitimate Family Offices

Not all family offices are created equal, and Witkowski provides a practical "family office test" to help founders identify legitimate ones. He explains, "Legitimate single-family offices have $100M+ in investable assets, employ in-house professionals, and avoid outsourced advisors." Additionally, credible representatives should be researchable and directly tied to the family or investment arm. This "sniff test" can help founders avoid wasting time with less serious or unqualified investors, ensuring they focus their efforts on genuine opportunities. Verifying these criteria can save valuable time and resources in the capital-raising process.

Playing the Long Game

Finally, Witkowski highlights the importance of patience when dealing with family offices. Unlike venture capital firms, which may be driven by urgency, family offices prioritize alignment and long-term value. "Family offices invest in alignment, not urgency; play the long game for access to capital," he states. Founders must be prepared to invest time and effort into building relationships, as the payoff may not come immediately. However, the rewards can be substantial, as family offices often provide not just capital but also strategic guidance and long-term support, making them ideal partners for sustainable growth.

Conclusion

Raising capital from family offices requires a strategic, patient, and relationship-focused approach. By understanding their unique characteristics, building genuine connections, and aligning on long-term goals, founders can tap into this powerful source of private capital. As Jesse Witkowski aptly puts it, "The smartest founders raise capital from family offices." With the right strategy, you can too.

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